38.2-1316.4 - Credit allowed any ceding insurer. - Virginia Statutes

§ 38.2-1316.4. Credit allowed any ceding insurer.

Credit shall be allowed any ceding insurer under the following conditions:

1. Credit shall be allowed when reinsurance is ceded to an assuming insurernot meeting the requirements of § 38.2-1316.2 or § 38.2-1316.3 but only withrespect to the insurance of risks located in jurisdictions where suchreinsurance is required by applicable law or regulation of that jurisdiction.

2. Credit, in the form of a reduction from liability for reinsurance ceded toan assuming insurer not meeting the requirements of § 38.2-1316.2 or §38.2-1316.3, shall be allowed in an amount not exceeding the liabilitiescarried by the ceding insurer and attributable to the reinsurance, providedsuch reduction does not exceed the amount of funds held by or on behalf ofthe ceding insurer, including funds held in trust for the ceding insurer,under a reinsurance contract with such assuming insurer as security for thepayment of obligations thereunder, if (i) such security is held in the UnitedStates subject to withdrawal solely by, and under the exclusive control of,the ceding insurer; or (ii) in the case of a trust, held in a qualifiedUnited States financial institution. The required security may be in theform of:

a. Cash.

b. Securities listed by the Securities Valuation Office of the NationalAssociation of Insurance Commissioners and qualifying as admitted assets withadequate liquidity and readily determinable market value.

c. Clean, irrevocable, unconditional letters of credit issued or confirmed bya qualified United States financial institution, as defined in this article,no later than December 31 in respect of the year for which filing is beingmade, and in the possession of the ceding company on or before the filingdate of its annual statement. Letters of credit meeting applicable standardsof insurer acceptability as of the dates of their issuance (or confirmation)shall, notwithstanding the issuing (or confirming) institution's subsequentfailure to meet applicable standards of insurer acceptability, continue to beacceptable as security until their expiration, extension, renewal,modification or amendment, whichever first occurs.

d. Any other form of security acceptable to the Commission.

(1991, c. 264.)